It’s that time again. A new year is here, which means a volatile 2018 is in the rearview mirror. The markets suffered a steep drop at the end of last year after climbing steadily through the first three quarters. A number of factors contributed to the markets’ fourth-quarter tumble, including tariffs, interest rate hikes and trouble in the tech sector.
 
A new year doesn’t mean those challenges are gone, but it does represent a fresh start. And if history is any guide, January can be a strong month for investors. According to a study from LPL Research, in the 68 years from 1950 through 2017, January has been a positive month for the S&P 500 41 times. It’s been negative 27 times.1
 
As any investor knows, history doesn’t guarantee future performance. However, there does seem to be a correlation between market performance in January and the rest of the year.
​
How do January returns impact the rest of the year?
 
According to LPL Research, there’s a relationship between January returns and market returns over the remainder of the year. Its research showed that during years in which there was a positive January return, the market had an average return of 12.2 percent over the next 11 months. When the January return was negative, the S&P 500 returned only 1.2 percent the rest of the year.1
 
If January returns are more than 5 percent, the correlation is even more pronounced. In those years, the market had an average return of 15.8 percent over the next 11 months. In fact, when January has a return of more than 5 percent, the rest of the year is positive 91.7 percent of the time.1

What is the January effect?
 
Why has January been positive more often than not? And why does January’s return seem to impact the rest of the year? There are no definitive answers to these questions, but there are theories.

There’s an idea called the “January effect,” which suggests that January returns may be the product of tax strategy. Investors sell stocks in December to harvest tax losses before the end of the year. That depresses prices and creates a buying opportunity in January. Because investors sold at the end of the year, there’s cash on the table to buy in the beginning of the next year.
 
Of course, this is just a theory. There’s no way to conclusively prove whether the January effect is a real phenomenon. Even if it could be proved, it’s never wise to change your long-term investment strategy based on short-term opportunities.
 
If you’re concerned about the volatility in 2018 or the coming year, now is a great time to meet with a financial professional. They can help you review your strategy and possibly make changes that reduce your risk exposure and allow you to take advantage of opportunities.
 
Ready to evaluate your investment strategy? Let’s talk about it. Contact us today at Senior Care Alliance. We can help you analyze your needs and goals and implement a plan. Let’s connect soon and start the conversation.
 
1https://www.thestreet.com/story/14469889/1/stock-market-s-strong-january-performance-bodes-well-for-the-rest-of-the-year.html
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
 
18345 - 2018/12/31

A new year is here, and with it comes a flood of year-end tax documents like W-2s, 1099s and others. Before you know it, the April 15 tax filing deadline will be upon us, and it will be time to submit your return.

It’s always wise to meet with your financial professional at the beginning of the year. It gives you an opportunity to discuss the past year, your goals for the coming year and your tax strategy. However, a consultation with your financial professional could be especially helpful this year.
 
The Tax Cuts and Jobs Act was signed into law in late 2017 by President Trump. While some of its changes went into effect last year, 2018 was the first full calendar year under the new law. The return you file in April will likely be the first that reflects much of the law’s changes. Below are a few of the biggest changes and how they could affect your return:
​
Increased Standard Deduction
 
The new tax law impacted a wide range of credits and deductions, from the deduction of medical expenses to credits for child care. Those who itemize deductions may have felt the brunt of these changes.
 
However, the tax law significantly increased the standard deduction. In 2017 the standard deduction was $6,350 for single filers and $12,700 for married couples. The new law increased those numbers to $12,000 and $24,000, respectively.1
 
Given the changes to itemized deductions and the increased standard deduction, you may want to consult with a financial or tax professional before you file your return. If you’ve traditionally itemized deductions in the past, that may no longer make sense.

New Tax Brackets
 
The new tax law also made significant changes to the tax brackets. There are still seven different brackets, just as there were before the passage of the law. And the lowest rate is still 10 percent. The top income tax rate is down to 37 percent, however, from 39.6 percent.2 There are similar cuts throughout the rest of the brackets as well.
 
The law also made changes to the income levels for each bracket. Generally, the bracket levels were increased throughout the tax code, which means you have to earn more before moving into a higher bracket. Under the old tax code, for example, a married couple earning $250,000 would be in the 33 percent bracket. Under the new law, that same couple would be in the 24 percent bracket. A single individual earning $80,000 would be in the 28 percent bracket under the old law but is now in the 22 percent bracket.2

Itemized Deduction Changes
 
As mentioned, the new tax law increased the standard deduction amounts. However, those increases came at the expense of many itemized deductions. The new law eliminated or reduced many common deductions, including those for state and local taxes, real estate taxes, mortgage and home equity loan interest, and even fees to accountants and other advisers.
 
However, there could be other opportunities to boost your itemized deductions above the standard deduction level. Charitable donations are still deductible, as are medical expenses assuming they exceed the 7.5 percent threshold. If you’re a business owner, you can deduct many of your expenses, including up to 20 percent of your income assuming you meet earnings thresholds.3
 
Ready to develop your tax strategy? Let’s connect soon and talk about taxes and your entire financial picture. Contact us today at Senior Care Alliance. We can help you analyze your needs and goals and implement a plan.
 
1https://www.nerdwallet.com/blog/taxes/standard-deduction/
2https://www.hrblock.com/tax-center/irs/tax-reform/new-tax-brackets/
3https://money.usnews.com/investing/investing-101/articles/know-these-6-federal-tax-changes-to-avoid-a-surprise-in-2019
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
 
18326 - 2018/12/26

​The holiday season is here, and that means it’s time to find the perfect gifts for your family and friends. However, this could also be the perfect time to give a gift to yourself. While it might be nice to give yourself the latest gadget, consider a gift that will have a much more lasting impact. For example, you could give yourself financial peace of mind. According to a new study, you might be able to obtain it simply by changing your mindset.
 
A study from Wells Fargo recently found that those individuals who have a planning mindset are more likely to describe themselves as thriving in both their financial life and overall life. They’re also 42 percent less likely to have high levels of financial stress and, on average, have 3.1 times more in retirement savings than those who do not have a planning mindset.1
 
So what is a planning mindset, and how do you obtain it? Below are the four key criteria identified by the study as the characteristics of those with a planning mindset. If these characteristics don’t sound familiar to you, it might be time to reassess your financial mindset.

Set financial goals. 

Individuals who have a planning mindset are in the habit of setting goals for themselves. Think about the past six months. Have you set any financial goals for yourself in that period of time? Have you actively pursued those goals?
 
If not, there’s no time like the present to become goal-oriented. You could even start with something small, like paying off a credit card balance or reaching a target in emergency savings. Pick something to get yourself in the habit of setting and pursuing financial goals.

Work towards a big long-term objective. 

Modest short-term goals are important, but long-term goals are also critical. You may have general long-term goals such as retiring in the future or paying for your child’s education.
 
However, it’s helpful to make those long-term goals specific. Work with a financial professional to determine exactly how much you need to save to pay for your child’s education or to fund a comfortable retirement. Once you estimate the cost of your goal, you can then develop an action plan to make your long-term goal a reality.

Shore up your immediate financial future. 

It’s often hard to focus on long-term goals when you have stress and anxiety about the present. You may be concerned about more pressing issues such as paying your bills on a monthly basis or tackling debt.
 
Individuals with a planning mindset are comfortable with their financial situation in the near term, which allows them to focus on longer-term goals. Again, a financial professional can help you develop a plan to overcome your near-term financial challenges. Perhaps you need to bolster your emergency savings. You might benefit from using a budget. Once you feel more comfortable in the short term, you can start focusing on large long-term objectives.

Save for retirement today. 

Retirement is a major financial challenge for most people. In fact, nearly 60 percent of Americans are concerned that they won’t have enough money to fund a comfortable retirement.2
 
However, individuals with a planning mindset know that saving today is always a wiser strategy than putting retirement off for the future. Even if you can save only a modest amount toward retirement, that’s still better than not saving at all. Time is the most powerful tool at your disposal. If you contribute money now, you give those funds the opportunity to grow and compound over a long period of time, which can help you accumulate more assets before retirement.
 
Ready to adopt a planning mindset in 2019? Let’s talk about it. Contact us today at Senior Care Alliance. We can help you establish goals and develop an action plan. Let’s connect soon and start the conversation.
 
1https://www.businesswire.com/news/home/20181114005575/en
2https://news.gallup.com/poll/233642/paying-medical-crises-retirement-lead-financial-fears.aspx
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
 
18280 - 2018/11/28

Thinking of giving to charity this holiday season? You’re not alone. For many people, the holiday season is also the giving season. Perhaps you’re going to donate old items such as clothes, toys or furniture. Or maybe you’d like to donate your time and volunteer with your favorite charity.
 
Of course, you may be considering a much more sizable donation, like a significant amount of assets. A monetary donation to a charity can obviously be helpful for the organization. It can also provide you with important tax benefits. And you get the benefit of seeing how your donation can help others.
 
Before you write a check, though, you may want to meet with a financial professional. You can give money or assets to a charity in a variety of ways. The right strategy depends on your needs and goals. Below are a few ways you can donate to your favorite charity:

Annual Donations

Perhaps the simplest approach is to write a check to your favorite charity each year. This strategy is straightforward, and it gets the funds to the charity in the quickest way possible. You also may be able to deduct your donation from your taxes.
 
Talk to a tax professional before you do this, though. There are caps on how much you can deduct as a charitable gift. You also may be able to carry forward some of your gift as a deduction in future years. If you’re contributing assets like securities instead of cash, the deduction rules can be somewhat complicated. A financial professional can help you develop the right strategy.

Life Insurance

Do you have a permanent life insurance policy that you no longer need? You could stop paying the premiums, surrender the policy and take the cash value as a lump sum. However, that would create a taxable event.
 
An alternative is to donate your policy to charity. You simply transfer the policy to the charity, which becomes the owner and beneficiary. Upon your death, the death benefit is paid to the charitable organization. The policy also continues to build tax-deferred cash value.
 
When you transfer ownership of the policy to the charity, you may be able to deduct your past premium payments from your current tax return. You also may be able to deduct any future premium payments that you make. You get a current tax benefit, and the charity gets a sizable donation in the future.

Charitable Trust

Perhaps you want to leave part of your estate to a favorite charity. One way to do this is with a charitable remainder trust. You set up a trust for the benefit of your charity and then transfer assets into the trust. The trust then manages those assets and possibly even sells them for diversification purposes. Because the trust is meant for charity, you avoid any taxes related to gains.
 
The trust invests the assets to generate income, which it pays to you for the remainder of your life. When you pass away, the trust distributes the assets to the charity according to your instructions. A charitable trust can be a powerful gifting tool, but it can also be complex. A financial professional can help you determine if it’s right for you.
 
Ready to develop your gifting strategy? Let’s talk about it. Contact us today at Senior Care Alliance. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
 
18276 - 2018/11/27

​Long-term care is a very real threat for many retirees. Driven largely by the rise of Alzheimer’s and other cognitive conditions, long-term care is a likely outcome for most seniors. The U.S. Department of Health and Human Services estimates that 70 percent of today’s 65-year-olds will need long-term care at some point in their lives.1
 
The threat of long-term care may loom even larger for women, though. Much of the risk stems from the fact that women are likely to live longer in retirement than men. The Society of Actuaries estimates that a 65-year-old woman has a 50 percent chance of living to age 90 and a 25 percent chance of living to 96. A 65-year-old man, on the other hand, has the same odds of living to 87 and 92, respectively.2
 
A longer life span is always a good thing. However, it can bring certain challenges. One is that a longer life span means more years in retirement. Those years may need to be funded with distributions from your savings, which means you’ll need to make your savings last over a longer period of time. You could face financial difficulties in the later years.

A longer life span could also mean you’ll face more serious health challenges. As you age, you may be more likely to suffer cognitive issues, cancer, heart disease or a wide range of other issues.
 
Longevity can also influence your long-term care needs. Below are a few long-term care challenges that are specific to women. If you don’t have a long-term care strategy, now may be the time to develop one. A financial professional can help you examine your risk and create a plan.

Women are more likely to live alone in retirement.
 
It naturally follows that since most women outlive men, women are also more likely than men to live alone in retirement. Recent studies by Pew Research show that 32 percent of all women over the age of 65 live alone. While that’s down from a high of 38 percent, it’s still much higher than the 18 percent of men in that age group who live alone.3
 
Living alone can have a big impact on long-term care. Married couples are able to rely on each other for the early stages of care. That can delay the need to hire an in-home aide or even move into a facility.

A single or widowed retiree may not have that option. If you need help with mobility, meal preparation or even household chores, you may need to hire someone to do it. If you get to the point where you need assistance regularly, you may have no choice but to consider a facility.

Women need care longer than men.
 
Another natural result of longevity is the need for more care. The U.S. Department of Health and Human Services estimates that the average woman will need long-term care for 3.7 years, while the average man will need care for 2.2 years.1
 
According to a study by Genworth, the average monthly cost in 2018 for a full-time home health aide or a room in an assisted living facility was $4,000.4 That means the extra 1.5 years on average spent in long-term care could cost a woman an additional $72,000 over her male counterpart’s costs.
 
It’s important to note that Medicare often doesn’t cover this care. It may cover portions that are related to skilled nursing care and medical treatment, but even that coverage is usually partial and temporary. You may want to consider a long-term care insurance policy to fund the portion of care that isn’t covered by Medicare.

Women are more likely to care for others.
 
Even if you don’t need care in retirement, you may be called on to care for others. According to the Family Caregiver Alliance, 66 percent of all caregivers are female, and these caregivers provide 50 percent more care in terms of hours than their male counterparts.5
 
This care can have an impact on your finances and your health. Women are more likely than men to work fewer hours, pass up a promotion and even retire early because of caregiving. A female caregiver is also more likely to suffer from heart disease and cognitive issues and to skip regular wellness checkups and exams.5
 
It’s important not only for you to have a long-term care strategy, but also for your spouse to have one. If he doesn’t, you may become his long-term care provider by default. That could have a sizable impact on your retirement and your future health.

Ready to plan your long-term care strategy? Let’s talk about it. Contact us today at Senior Care Alliance. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.
 
1https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html
2https://www.fidelity.com/viewpoints/retirement/longevity
3http://www.pewsocialtrends.org/2016/02/18/smaller-share-of-women-ages-65-and-older-are-living-alone/
4https://www.genworth.com/aging-and-you/finances/cost-of-care.html
5https://www.caregiver.org/women-and-caregiving-facts-and-figures
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
18148 - 2018/10/17

​

​Social Security recently announced good news for retirees. In 2019, benefits will increase 2.8 percent. That’s the largest cost-of-living adjustment (COLA) in more than a decade. Last year benefits increased only 2 percent, and they didn’t increase at all in 2010, 2011 or 2016.1
 
Cost-of-living adjustments are meant to help retirees cope with inflation. Inflation is a natural part of the economy. As the economy expands, costs for labor, materials and other resources tend to increase. That drives up prices for a wide range of goods and services. While inflation isn’t necessarily a bad thing, it can be dangerous for seniors on fixed incomes.
 
That’s where COLA comes in. Social Security offers COLAs to help seniors keep up with inflation and maintain their standard of living. The cost-of-living adjustments are based on a broad version of the consumer price index (CPI). However, there’s been debate about whether Social Security’s formula is actually appropriate.

Why COLA May Not Be Accurate for Retirees
 
There are a couple of reasons why you shouldn’t count on a COLA to help you keep up with inflation. First is the way in which COLA is calculated. Social Security uses the CPI-W as an inflation index. The CPI-W is based on expenses for urban workers.
 
Retirees have different expenses than workers, though. Many retirees spend much more of their income on health care than the average worker does. They also may face increased costs for housing, especially if they’re staying in an assisted living facility. The CPI-W doesn’t account for this increased spending on health care and housing, so the inflation rate may not be appropriate for retirees.
 
Also, Social Security probably doesn’t cover all your retirement spending. After next year’s increase, the average Social Security benefit will be $1,461 per month.2 While that’s a helpful amount, it’s probably not enough to fund your entire retirement. That means you’ll also need to increase your other income streams to fully keep up with inflation.

Tips to Plan for Inflation
 
There are a number of strategies you can implement to increase your income and keep pace with inflation. One is to stick with a long-term plan and remember that you’ll need growth to fund a long retirement. Work with your financial professional to develop a strategy that minimizes risk but also allows for growth to increase your income.
 
You could also use annuities, which are effective tools for creating guaranteed* lifetime income streams. Some offer inflation protection so your income increases each year. Others, like variable annuities, allow you to grow your assets and lock in gains, and then take guaranteed* income for life.
 
A long-term care insurance policy with an inflation rider could also be helpful. The costs of long-term care are rising every year. An insurance policy with an inflation rider will increase your benefit so it keeps pace with rising costs. When you need long-term care, the insurer will pay some or all of the expense.

Ready to develop your retirement inflation strategy? Let’s talk about it. Contact us at Senior Care Alliance today. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.
 
1https://www.ssa.gov/cola/
2https://www.fool.com/retirement/2018/10/16/heres-the-average-social-security-benefit-for-2019.aspx
 
*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
18149 - 2018/10/17

​

​If you’re behind on your retirement planning, you’re not alone. A recent study from Gallup found that more than half of Americans worry that they won’t have enough money in retirement.1 Think you can overcome your savings gap by working into your late 60s or even your 70s? You’re not alone in that strategy either.
 
According to a Bankrate study, 70 percent of workers want to continue working as long as possible. More than 40 percent of those respondents said they’ll have to keep working because they will need the money.2
 
Working late into life may seem like a reasonable and prudent idea. After all, if you’re working, you’ll have regular income and can continue contributing to your retirement accounts. You also eliminate years of retirement spending that may drain your savings.
 
Unfortunately, a strategy to work late into retirement age may not be as reliable as you might think. Below are a few reasons why you may want to rethink your plans to work into your 60s or even 70s. While working longer may be a good idea, it may also be wise to have a backup strategy.

Disability
 
The Council for Disability Awareness estimates that the average adult has a 25 percent likelihood of becoming disabled.3 However, the risk may rise with age. The Centers for Disease Control and Prevention says 60 percent of all adults age 65 and older suffer some kind of limitation on at least one basic living activity.4
 
Disability can always have a substantial financial impact, but it can be even more devastating for older workers. If you’re unable to work, you’ll lose out on income and retirement contributions. You’ll also need to take money from your savings to fund your lifestyle and pay for your care.

Long-Term Care
 
According to the U.S. Department of Health and Human Services, 70 percent of all 65-year-olds will need long-term care at some point in their lives.5 Obviously, if your health has deteriorated to the point that you need long-term care, you won’t be able to work.
 
However, another possibility is that your spouse may need care. If he or she needed full-time support, would you be able to hire in-home help? Or would you have to quit working to provide the care and assistance? And how would that impact your finances? Again, your desire to work may be in conflict with conditions beyond your control.

Job Loss
 
A recent Transamerica study found that 30 percent of retirees stopped working earlier than they would have liked. A majority—two-thirds—quit because of employment reasons, primarily job loss.6
 
Employment conditions can change quickly. Just because your job is secure today doesn’t mean it will be in the future. Working late into life may be the right decision, but be sure to have backup strategies in the event your job is eliminated.
 
Ready to explore alternatives and backup plans? Let’s discuss it. Contact us today at Senior Care Alliance to start the conversation. We welcome the chance to help you analyze your needs and develop a strategy.
 

1. https://news.gallup.com/poll/210890/americans-financial-anxieties-ease-2017.aspx
2. http://www.bankrate.com/finance/consumer-index/money-pulse-0916.aspx
3. http://www.disabilitycanhappen.org/chances_disability/disability_stats.asp
4. http://www.cdc.gov/nchs/fastats/disability.htm
5. https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html
6. https://www.transamericacenter.org/docs/default-source/retirees-survey/retirees_survey_2015_report.pdf

 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
18087 – 2018/10/1

​https://www.kiplinger.com/article/retirement/T007-C032-S014-3-spending-strategies-for-your-retirement.html

If you’re worried about having enough money to fund your retirement, you’re not alone. According to the 2018 version of Gallup’s annual survey about Americans’ biggest financial worries, retirement topped the list for the 16th year in a row. Nearly two-thirds of respondents said they were concerned about not having enough money for retirement.

Of course, having enough money is only half of the equation. Even if you save a significant amount for retirement, you still have to manage your spending throughout retirement to make sure your funds last. Excessive spending can quickly deplete even the most substantial nest egg.
That’s why it’s so important for retirees to have a written spending plan. A spending plan serves as a budget and also as a guide for distributions from your retirement accounts. You can check your spending against the plan at any time to see if you are on track or if you have veered off course.
It’s no easy task, though, to develop such a spending plan. You can’t predict the future. You may not know what your spending needs will be as you get older. How do you develop a spending strategy when so many of the variables are unknown?

There are a few different approaches you can take to planning your retirement spending. Below are three strategies commonly used. Base your spending plan on your unique needs and objectives. The important thing is to have a plan that works for you and to follow that plan so you can protect your retirement assets.

Level Spending

Perhaps the simplest approach is to assume a level spending amount throughout your retirement. You might base this amount off your current spending, or you could base it off a percentage of your pre-retirement income. The advantage of assuming a flat spending amount throughout retirement is that it makes it fairly easy to determine whether you’ve accumulated enough assets.

However, there are some issues with assuming a flat spending amount. One is that a flat spending plan may not account for unpredictable expenses that could pop up in retirement, such as home repairs, medical costs or even the occasional vacation. A flat spending plan also doesn’t account for inflation, which could have a sizable impact on your expenses over the long term. Although a flat spending plan may be simple, it may not be the most accurate approach.

Increased Spending

A second approach is to assume your spending needs will increase gradually from year to year throughout your retirement. For example, you might factor your expenses to increase at the same rate as inflation. Or you could build in greater increases in spending in your later years to account for long-term care needs and health care costs.

A plan that incorporates increasing expenses can be helpful, because it accounts for inflation and the possibility that you’ll have increased health care needs as you advance in age. However, you may want to enjoy the early years of retirement, when you are healthy enough to travel and pursue hobbies and other activities. If so, you may not like the idea of reducing your spending in the early years so you can spend more in your later years.

Dynamic Spending

One intriguing approach is to vary your spending from month to month or year to year. For example, if you plan on traveling in the warmer months of the year, you might assume your spending will increase in those months. During the fall and winter, though, you may opt to live on a much tighter budget.

A dynamic spending plan could have behavioral benefits. If you give yourself certain months or periods of time in which you’re allowed to spend more money on fun activities, you might have less incentive to go over budget during other times.

Of course, the tricky part of a dynamic spending plan is that you have to stick to the budget. If you don’t stay under budget during the lean months, you won’t be able to afford the periods of time when you are scheduled to spend more money on vacations or other fun activities. If you don’t have that kind of financial discipline, a dynamic spending plan may not be the best option for you.

The Bottom Line

Your spending plan and budget can make or break your retirement lifestyle. Spend too much early on, you may not have enough to cover inflation or rising health care expenses. At the same time, you want to enjoy the lifestyle you and your spouse envision for your golden years.
Discuss with your spouse the goals you have for retirement and write them down. Then, discuss the timeframe in which you want to achieve them. Cruise at the beginning of your retirement? Month-long European vacation when you’re 75? By planning your budget around the big expenses now, you will have room to plan for any surprises in retirement.

​Estate planning is a critical part of any financial strategy, but unfortunately it’s something that many people skip. An estate plan helps you distribute your assets to loved ones after you pass away. It also helps you protect your family and leave a legacy.
 
Contrary to popular believe, an estate plan isn’t just for people who have accumulated vast wealth. Even those with a modest estate should think about what will happen with their assets after their death. Before you develop your plan, though, you should think about what kind of goals you want to accomplish. Below are a few objectives you may want to incorporate into your legacy plan:

Providing protection for your loved ones.
 
Perhaps the most important objective any person can have with estate planning is providing support and protection for loved ones. That’s especially true if your spouse and children rely on you for financial support.
 
You’ll likely want to start by deciding who should receive assets. If you have a spouse, you may want to leave the bulk of your estate to him or her. You also may want to leave assets for children, grandchildren, extended family or even a favorite charity.
 
After you decide who gets what, you’ll then want to consider how best to distribute the funds. For example, you may want to use a trust so you can minimize the impact of probate and exercise more control over the distribution of your assets. You might also consider increasing your life insurance coverage to maximize how much you can leave behind.
 
One of the best ways to figure out what to leave to whom, and how to leave it to them, is to create a vision. Write down what you would like to see happen with your assets after you pass away, and then create a plan to make sure your vision becomes a reality.

Managing estate costs and risks.
 
If you’re not careful in your planning, you might jeopardize your estate. Even if you’re not wealthy enough to face estate taxes, there are still threats that could drain your assets. One of those is probate. This process can tie up asset distribution. On top of that, it can also come with large administrative and legal fees.
 
Another potential risk to your legacy is medical debt. End-of-life medical treatment and long-term care can be expensive. And if you haven’t prepared for these costs, then your family may be forced to pay for them from your estate. Supplemental insurance can cover the costs not paid by Medicare, and long-term care insurance can also be a valuable tool to protect against this risk.

Planning for incapacitation.
 
While it’s not pleasant to think about, there is a chance you’ll become incapacitated before you die. Usually a result of conditions like strokes or diseases such as Parkinson’s or Alzheimer’s, becoming incapacitated means that in the final days, weeks or even months before your death, you’ll be unable to communicate your medical and financial wishes to your family.
 
If you haven’t planned for this, your family may make decisions for you that you wouldn’t have otherwise made. But with tools such as a living trust, a power of attorney or a living will, you can minimize the financial impact of incapacitation. These are all fairly straightforward documents, and a financial professional can help you decide which ones are best for you.
 
Ready to develop your legacy plan? Let’s talk about it. Contact us at Senior Care Alliance for more information. We welcome the chance to help you analyze any remaining questions and develop a strategy. Let’s start the conversation today.
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
 
18086 – 2018/10/1

​Every financial strategy needs to be reviewed from time to time. Life can change quickly, and when it does, it’s important to make sure your financial strategy is still appropriate for your needs and goals. For many people, financial review often means analyzing investments, budgets and other documents.
 
You may not think that life insurance needs to be reviewed. After all, it’s a fairly straightforward tool. You pay a regular premium, and, in exchange, the insurer provides your beneficiaries with a tax-free payout upon your death.
 
The truth, though, is that if your life changes in a significant way, your coverage may no longer be appropriate, especially if you bought your policy years ago. Below are a few questions to ask about your life and your objectives. If you answer yes to any of these questions, it may be time to sit down with a financial professional.

Has the number of people in your household changed?
 
Are you the main financial provider in your household? Did you purchase life insurance to protect your family in case you pass away? That’s a common reason for purchasing life insurance. If you pass away, your spouse, children and other dependents could face a wide range of financial challenges, including debt and loss of income. They may have to put off major life goals such as college or retirement.
 
Your life insurance coverage should change as your number of dependents changes. If you have additional children, you likely need more protection. Similarly, if your kids grow up and move out of your house, you may not need as much coverage.
 
Marriage and divorce can also impact your need for life insurance. If you get married, you may need to review your coverage, especially with regard to your beneficiary designations. If your spouse isn’t named as a beneficiary, he or she will not receive the death benefit. People often get divorced and remarried but forget to change their beneficiary designation. The risk is that your former spouse could end up receiving the life insurance proceeds.

Have you purchased a home, business or other sizable asset? Did you take out a loan to do so?
 
A major purchase is another event that may trigger a life insurance review, especially if you took out a loan to make the purchase. The classic example is a new home. Assume you purchase a home and take on a significant, long-term mortgage. Many lenders require a borrower to also carry life insurance to cover the balance. Even if the lender doesn’t require insurance, however, it may be a wise idea. The insurance proceeds could help your spouse or children cover the balance if you pass away.
 
You also may want to consider life insurance if you take out a loan for any other major purchase. Think about whether your dependents could cover the loan payments without your income. Also consider whether they could easily sell the asset to pay down the loan. If the answer to both of these questions is no, then more life insurance may be a smart strategy.

Have you made a career change?
 
Have you changed employers, started a business or maybe even received a promotion? If so, now may be the time to review your life insurance. Many workers rely on employer life insurance benefits for coverage. If you changed jobs, however, it’s possible that your new employer doesn’t offer the same level of protection.
 
Your new role may have also come with a raise. If you’re earning more money, your family stands to lose a greater amount of income when you pass away. That means they may need more insurance coverage to fill the gap. Additional protection may be necessary. The only way to truly know whether you have an appropriate amount is by conducting a detailed needs analysis with your financial professional.
 
Is it time to review your life insurance strategy? Contact us today at Senior Care Alliance. We can help you analyze your needs and adjust your plan. Let’s connect soon and start the conversation.
 

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
17962 – 2018/9/4